GOVERNMENT OF ODISHAELECTRONICS & INFORMATION TECHNOLOGY DEPARTMENT

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No 2i a-~~ /E&IT BhubaneswarE&IT-V-Dev-Il-12/2018 Dated — 6

NOTIFICATION

Government in E&IT Department is in process to bring out Odisha SPO Policy-

2019 for promotion of BPO Industries and to create employment opportunities in the

State. A copy of the draft Odisha BPO Policy-2019 is published at www.odisha.gov.in on5rn February 2019 to invite suggestion I feedback from the General Public, IT

Entrepreneurs before finalization of the same. Suggestion I feedbacks may be submitted

online to itpromotion~ocac.in, within 15 (fifteen) days of the publication of this

notification.

By order of the Governor

\~ k~Special Secretary to Government

Memo No. ‘4 -~ IE&IT Dated frS~ 2~’1 9Copy (with soft copy) forwarded to the Head, State Portal Group, IT Centre,

Secretariat, Bhubaneswar for information and necessary action. He is requested toupload the notice in the Government website for wide circulation.

Deputy Secretary to Government

Memo No. IE&lT Dated ot-o -10Copy forwarded to the Director, STPI, Fortune Tower, Chandrasekharpur,

Bhubaneswar for information and necessary action. The IT Entrepreneurs may berequested to furnish their suggestion I feedback etc.

‘1Deputy Secretary to Government

E&IT-V-Notiflcaiions.’P-35

GOVERNMENT OF ODISHA

Odisha BPO Policy=2o19

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ELECTRONICS & INFORMATION TECHNOLOGY DEPARTMENT

ODHSHA

Odisha BPO Policy-2019

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TABLE OF CONTENTS

SI No Subject Page No

1 Introduction 3

2 Background 3

3 Destination Odisha 4

4 Applicability and Obligation of Policy 5

5 Financial Incentives! Subsidies! Exemptions 5

6 Other Facilities 8

7 Regulatory Approvals 9

8 Policy Implementation and Monitoring 10

9 Miscellaneous 10

10 Definitions 11

11 Appendix 13

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Odisha BPO Policy-2019

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1. Introduction: Outsourcing has been a popular management tool amongthe successful organizations across the world. It has received enhancedinterest in the past several years because of its potential economic andstrategic impact. The supplier-side of the global off shoring market hasbecome more competitive in light of the emerging preference for presence inoffshore as well as near-shore locations. Moreover there has also been anoticeable change in the service offerings of service-providers migrating tohigher-end strategic processes. The objective of off shoring has progressedfrom being a mere cost-saving initiative to one that is adopted for realizingprocess improvements, and enhancing efficiencies.

2. Background: According to National Association of Software and ServicesCompanies (NASSCOM), revenue for the overall sector would increase 13-15 per cent year-on-year next financial year. The BPO sector has set a goalof $50 billion in revenue by 2030. The Indian lT-BPM sector continues to beone of the largest employers in the country directly employing nearly 3million professionals and indirectly employing about 10 million. Tier I Citiessuch as Bangalore, Hyderabad, Pune, Delhi etc. have emerged as BPO/BPM hubs, however, NASSCOM believes that for the BPO sector to keep itsgrowth trajectory, corporate should go to Tier-Il and-Ill. BPM Cost savingsand access to talent are the key drivers for adoption for tier Il/Ill locations. ACompany can save costs by 40 per cent in these destinations. Though, it willbe difficult for these BPO/BPM organizations to find quality office spaces,good quality broadband connectivity, quality of talent in smaller cities and nodirect cost saving due to similar pay structures by most players howeverexcept for some living cost adjustment allowances, major savings will accruefrom lower attrition, which in turn implies lower replacement cost (asreplacement at similar levels also comes with at least 15% escalation). By2020, the industry is expected to create over 300 million square feet ofadditional office space as well as 3.8 million incremental direct jobs.

Cities such as Bhubaneswar, Cuttack and existing STPI locations(Berhampur, Balasore, Rourkela, Bhubaneswar) and four more locationsJajpur, Sambalpur, Angul and Koraput (Jaypore) where new STPI’s will besetup soon can also become BPO/ BPM hubs in India. Startups! existingBPO/ RPM organizations initiating operations in Bhubaneswar may nowneed additional hand holding, financial incentives and subsidies. This StateBPO Policy of 2019 will help to achieve this objective.

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Odisha BPO PoIicv-2019

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As per the trend of YoY growth of overall BPO/ BPM industry, Gove(nment ofOdisha has chalked out a strategy to create approximately 30,000 jobs inOdisha by 2022 in this sector. Through this Policy, Government endeavors tobuild a strong foundation in the State for the BPO industry and attractentrepreneurs to invest and set up centers in the State. Creation of 30,000jobs (working in two shifts) will require allocation of approximately 7.65 lakhsquare feet of office space and 22.5 Acres of Developed Land bank with anapproximate capital investment of about Rs 200 crore.

3. Destination Odisha: Odisha offers several unique advantages forinvestors today. Bhubaneswar and several neighboring cities havecollectively come up as an educational hub in the eastern India with thesetting up of IlTs, lIMs, AIIMS, lilT, NISER, AISER and several otherresearch centers of Government India apart from a host of reputed institutesof technology. The followings are some more additional advantages of theState:

3.1 Availability of Talent: Traditionally, Odisha has been providing qualitymanpower to the BPO industry across the country. Odisha has a multitude ofArts, Science, Commerce, Engineering, Law, Medical and Nursing collegesas well as high quality training institutions. This considerable talent pool ofwell qualified graduates who can be employed by BPO companies.

3.2 Competitive Wages: Considering lower living index in cities I towns inOdisha as compared to Metros and other cities of the country like Mumbai,Delhi or Bangalore, the actual wage compensation for of Odisha BPOmanpower will be lower than other outsourcing destinations of India.Therefore, companies who outsource to Odisha would have real cost savingsfrom off shoring.

3.3 Infrastructure: Today, Odisha has high-tech infrastructure that rivals otherdeveloped states. With new airport, highways and incredibly affordablebroadband internet access, Odisha’s infrastructure makes it an easy place todo business. Odisha’s key advantage on cheaper real-estate, availability oftalent, conducive business environment and strategic location for any globalbusiness offers some unique advantages that can help companies grow theirbusinesses. Specifically, Bhubaneswar can serve as a low-cost hub toservice a global company’s Asian operations. This foreign investment, alongwith Odisha’s continued focus on growing and strengthening the BPOindustry within the country, will place propositiOn Odisha as viable BPD optionfor many global companies.

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Odisha BPO Policy-2019

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policy~ shall be4. Applicability and Obligation of Policy: Theapplicable to BPO/BPM units subject to the following conditions:

4.1 BPO/BPM and other allied activities as listed in definition of IT EnabledService (ITES) shall be eligible for benefits/incentives under this policy.

4.2The Policy shall also be applicable to new BPO/BPM units(s) with a minimumnumber of 25 (Twenty five) seats and above mentioned against the cities/towns of Odisha stated below.

4.3 The Policy shall also be applicable for the existing BPO/BPM units approvedunder the India BPO Promotion Scheme (1BPS) or any other scheme of Govtof Odisha who will go for expansionl modernization/ diversification oftheir capacity by a minimum 50% of their original approved capacity as a newunit.

4.4The BPO/BPM unit shall be under obligation to commence its operationswithin 6 months, from date of issue of approval. The BPO/BPM unit mustcommit and provide guarantee to operate for a minimum period of 3 (Three)years from commencement of operations for availing all incentives under thispolicy.

4.5 Entities availing benefits by Govt of India under India BPO PromotionScheme (1BPS) shall not be eligible for any incentives/benefits under thisPolicy for the same unit.

4.6The Policy will be in operation for 5 years from the date of its GazetteNotification. However, the State Government may at any time amend any provisionof this Policy.

5. Financial Incentives! Subsidies! Exemptions:

5.1 Subsidy on capital Investment: Capital Investment Subsidy on admissibleitems as per Appendix-A would be provided on per seat/person to any BPDunit location wise as per following:

Sl.No Location Minimum Capitalseats for Investmenteligibility Subsidy per

seat ( in Rs)1 Urban Areas under the jurisdiction of 300 1.05 Iakh

Bhubaneswar MunicipalCorporation

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Odisha BPO Policy-2019

Urban Areas under the jurisdiction ofDevelopment Authorities of Cuttack,Rourkela, Berhampur, Balasore,Sambalpur, Angul, Jajpur and anyother location of 22 Districts ofOdisha except any location inKalahandi, Koraput, Malkangiri,Bolangir, Sonpur, Nabarangpur,Nuapada and Raygada District

The capital subsidy will be claimed in five installments as per the following:

Sl.No Installment Percentage Eligibility1 Vt 20% Date of commencement of BPO unit2 2~ 25% Completion of 1 Year~ 3rd 25% Completion of 2 Year~ 4th 30% Completion of 3 Year

In order to ensure basic quantum of employment generation requirement,minimum 80% of approved seats/Persons is required for financial assistanceclaim which will be paid in pro-rata basis for any shortfall from the minimumeligible number.

5.2 State GST Reimbursement: New BPO/BPM units shall be eligible for

reimbursement of hundred per cent (100%) of State GST (SGST) paid for a

period of five (5) years from the date of commencement of BPO unit, limited to

hundred per cent (100%) of fixed capital investment provided that the SGST

reimbursement will be applicable only to the net tax paid, after adjustment of

input tax credit against the output tax liability.

Existing BPO/BPM units taking up expansion/modernization/diversification as

defined in Industrial Policy Resolution (IPR) shall be eligible for reimbursement

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75 1 .1S1akh

3 Any location of Kalahandi, Koraput 25 1.25 lakhMalkangiri, Bolangir, Sonpur,Nabarangpur, Nuapada andRaygada District

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Odisha BPO Policy-2019

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of hundred per cent (100%) of State GST (SGST) paid for a period Wf five (5)

years from the date of commencement of new unit subject to the condition that

it shall be applicable only on increased production over and above the existing

installed capacity limited to 100 % of additional capital investment required for

taking up Expansion/Modernization/Diversification in a tapered manner

provided that the SGST reimbursement will be applicable only to the net tax

paid, after adjustment of input tax credit against the output tax liability.

5.3 Interest Subsidy Reimbursement:- Each new BPO/BPM unit (and

Expansion of Capacity/ modernization and diversification of existing

BPO/BPM unit in the State shall be entitled for reimbursement of an interest

subsidy @ 5% per annum on term loan availed from public Financial

Institutions / Banks for a period of 5 years from the date of commencement

of BPO/BPM unit subject to limit of Maximum Rs 20 lakhs.

5.4 Power Incentives: The BPO/BPM units being industries under PrioritySector of Government, Industrial tariff will be applicable. BPO/BPM units shallbe exempted from Electricity Duty and Electrical inspection fees upto acontract demand of 500 KVA for a period of 5 years from the date ofcommencement of BPO/BPM unit. These incentives will be subject to theguidelines of OERC and subsequent amendments from time to time.

5.5 Human Capital Investment Subsidy: Subsidy up to Rs.1000 per newlyrecruited employee per month for a training period of three months with amaximum limit of Rs 5 lakh shall be reimbursed by Govt. to each newBPO/BPM unit (and Expansion of Capacity/ modernization and diversificationof existing BPO/BPM units) for training and Capacity building of employees ofBPO/BPM units who are domicile of Odisha for a period not exceeding threeyears from the date of commencement of BPO/BPM units. This can beclaimed by the BPO/BPM Unit after one year i.e. three months training + ninemonths of continuous employment. Further, additional 20% subsidy each onthe above shall be given, if the employee newly recruited and trained is aWoman or Person with disability.

5.6 ESII EPF Reimbursement: Each new BPO/BPM unit (and Expansion ofCapacity/ modernization and diversification of existing BPO/BPM units) shall

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Odisha BPO PoIicy-2019

be entitled for reimbursement of the expenditure incurred towards contributionfor Employees State Insurance (ESI) and Employees Provident Fund (EPF)subject to a maximum of Rs.2 lakh per year for a period of maximum threeyears from the date of commencement of BPO/BPM units.

5.7 Internet Bandwidth Subsidy: Each new BPO!BPM unit (and Expansion ofCapacity! modernization and diversification of existing BPO!BPM units) shallbe entitled for reimbursement of 50% of internet bandwidth! leased linecharges per seat subject to a maximum of Rs.1 lakh per year per BPO!BPMunit for a maximum period of three years from the date of commencement ofBPO!BPM units. This will be reimbursed against actual bills!utilizations by theBPO!BPM units.

5.8 Stamp Duty Exemption: Each new BPO/BPM unit (and Expansion ofCapacity! modernization and diversification of existing BPO!BPM units) shallbe entitled for Stamp Duty exemption on lease ! sale agreement of land orbuilt up space allotted by Government !IDCO and other Govt agencies as perthe provisions of para 5.4.3 of IPR 2015 and its subsequent amendments.

5.9 Subsidy on Rent of Built up Space: Each new BPO!BPM unit (andExpansion of Capacity! modernization and diversification of existingBPD!BPM units) operating out of designated Government IT Towers shall beentitled for reimbursement of subsidised rent as per Electronics & ITDepartment Resolution No 2390 Dtd 28.07.2018 duly notified vide OdishaGazette Notification No 1345 Dtd 01.08.2018 and its subsequentamendments.

5.10 Assistance for marketing: Each new BPD unit (and Expansion ofCapacity! modernization and diversification of existing BPO units) shall beentitled for reimbursement of Marketing assistance as laid down in Para 6.14of ICT Policy 2014 and its subsequent amendments if any. This incentiveshall be available to a BPO unit once in a financial year.

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Odisha BPO Policy-2019

ii’‘46. Other Facilities:

6.1 Transport Facilities: The Government shall facilitate large BPO/BPMcompanies to enter into a contract with the State owned Road TransportCorporations and BPTSL to provide suitable dedicated transport services forcommuting their employees.

6.2 Single Window Clearance System: OCAC would act as a Single Windowfor undertaking the formalities related to Project Clearance & Facilitationmechanism. Standardized processes with defined timelines will be followed toprovide the clearances for the correctly submitted applications anddocuments.The online facilities for Combined Application Form (CAF)submission developed by IPICOL/OCAC shall also be facilitated.

6.3 Local Preference: The State Government may identify Govt services whichcan be outsourced to BPO/BPM units registered with MSME and operationalin Odisha under this Policy through tendering process with preference to localBPO/BPM units as below:

• 100% exemption from payment of EMD and cost of tender document• Matching of Li Price to award some percentage of work

6.4 BPOIBPM Parks: The IT Parks established for the IT industry shall alsoserve for the BPO sector. The incentives& concessions available to IT parksshall be extended to BPO!BPM Parks.

6.5 BPO/BPM Fairs : The State Government Shall facilitate in organizing andhosting major international! National and domestic events such as BPO fairsin Odisha so that the advantages of the State are showcased more vividlyand to create better business opportunities for the BPO!BPM units operatingin Odisha.

7. Regulatory Approvals:

7.1 BPO sector units shall be exempted from the provisions of chapter VI offactories Act 1948 (working hours for adults) as per the IPR 2015.

7.2 The BPO!BPM units shall be exempted from the purview of section 9, 10, 11and 23 of Odisha Shops and Commercial Establishment Act-i 956.

7.3 The BPOIBPM units shall be declared as public utility services for thepurpose of applications of provisions under Chapter V of the I.D Act 1947 asper IPR 2015 and subsequent notifications to be issued by Labour & ESIDepartment, Govt of Odisha from time to time.

7.4 General permission for three shift operations with women working in thenight for BPO!BPM units is grantes subject to the provision that the BPO!BPMunit(s) shall self-certify the precautions being taken in respect of safety andsecurity of employees.

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Odisha BPO Policy-2019

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8. Policy Implementation and Monitoring

8.1 An Apex Committee chaired by Secretary, E&IT and Chairman OCAC shallmonitor the policy implementation and approval/sanction of incentives. Thiscommittee would meet every quarter to take stock of the implementation ofthe policy with respect to its target and objectives.

8.2 The Odisha Computer Applications Centre (OCAC) would be the NodalAgency for implementation of the BPO Policy. The Odisha ComputerApplications Centre (OCAC) will be responsible for monitoring the progress ofvarious activities under this Policy through it’s PIU.

8.3 The Electronics & IT Department and/or OCAC shall undertake the followingactivities:

8.3.1 Provide Administrative Guidance and Support to Organizations forsetting up BPO/ BPM centers.

8.3.2 Provide guidance and support to arrange Infrastructure and othernecessary support from time to time for successful running of centersbased on existing government policies in effect.

8.3.3 Assist companies in selecting a location and in obtaining Governmentincentives & concessions.

8.3.4 Interactions with entrepreneurs/ IT companies for knowledge andpromotion

8.3.5 Policy implementation and timely approval of incentives.8.4 The disbursement of the incentives to the BPO/BPM units shall be made by

the implementing agency in accordance with the chronological order ofapproved claims.

9. Miscellaneous

9.1 This Policy will remain in force for 5 years from the date of notification or tillsubstituted by another policy. The State Government may at any time amendany provision of this Policy.

9.2 Doubts/Ambiguity relating to interpretation of any clause and / or disputerelating to the operation of any provision under this policy shall have to bereferred to the Electronics & Information Technology Department,Government of Odisha for clarification / resolution and the decision ofGovernment in this regard will be final and binding on all concerned.

9.3 Implementation of various provisions covering the incentives, concessionsetc. will be subject to the issue of detailed guidelines / statutory notifications,

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Odisha BPO Policy-2019

wherever necessary in respect of each item by the Electronics & InformationTechnology Department and concerned Administrative Departments.

10. Definitions

Information Technology Enabled Services (lTeS): shall mean servicerendering through application of Information Technology (IT) and shall includethe following:a. Call Centresb. Medical Transcriptionsc. Back Office Operation/Business Process Outsourcing (BPO)d. Knowledge Process Outsourcing (KPO)e. Insurance claim Processingf. Web/Digital Content Developmentg. ERP / Software and Application Developmenth. Financial and Accounting ProcessingI HR & Payroll Processing

IT enabled banking, non-banking services including insurance, pension,Asset Management and market related services

k Depository and Security registration and dematerialization servicesI Any other services as defined by Government of India & Government of

Odisha from time to time

Business process outsourcing (BPO) means the transfer of anorganization’s entire non-core but critical business process/function to anexternal centre who uses an IT-based service delivery or as modified byGovernment of Jharkhand from time to time

Business process management (BPM) means the disciplined approachto identify, design, execute, document measure, monitor and control bothautomated and non-automated business processes to achieve consistent,targeted results aligned with an organization’s strategic goals

Business process outsourcing centre/unit means a centre/unit thatprovides an IT-based service delivery for BPO

BPO/BPM means Business process out sourcing and Business processManagement

BPTSL means Bhubaneswar-Puri Transport services Limited

CAF means Combined Application Form

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Odisha BPO PoIicy-2019

Department means a Department of Government of Odisha

Government means Government of Odisha unless specified as the Government ofIndia or Government of a Particular state.

GST means Goods and Services Tax

GoO means Government of Odisha

IDCO means Odisha Industrial Infrastructure Development Corporation

Information Technology includes Information Technology, electronics,communications, e-Governance, rn-Governance initiatives, e-Commerce andrn-Commerce.

IPR means Industrial Policy Resolution being notified by Government of Odishafrom time to time

IT ApplicationllT Software means a computer program which is designed to helppeople perform an activity. It can be also defined as any representation ofinstruction, data sound or image, including source code or objet code, recorded inmachine readable form and capable of being rnanipulated to providing interactivityto a user with the means of a computer.1BPS means India BPO Promotion Scheme of Government of India

PIU means Project Implementation Unit set up in OCAC

STPI means Software Technology Parks of India

OCAC means Odisha Computer Application Center

OERC means Odisha Electricity Regulatory cornmission

Year means financial year starting on 1St of April & ending on 31st March unlessspecified otherwise

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Appendix-A

List of admissible items for capital supportS.No. Item description

1 Servers with OS2 Software and Hardware per license cost for BPO/ITES operations3 Networking Equipment (switches, router, firewalls, voice/videoconferencing, gateways4 Workstations (desktop, Laptop, IP phones, Headsets)5 Data Storage6 Structured cabling7 UPS8 Printer, copier, scanner & projector9 Refrigerator & water purifier

10 Fire & security system11 Computer Furniture12 Electrical wiring & fitting13 Central Air conditioning equipment, air conditioning systems

Captive Diesel Generator and transformer of capacity commensurate with the actual14 requirement of the unit15 Fax machine16 Private automatic branch exchange17 Data communication Equipment, modem & VSA

other misc. Goods not exceeding 5% of the total cost of above items including tools, kits and18 spares.

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